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PSC Adopts New Retail Energy Customer Protection Rules

Final Rules Include New Requirement For TPVs

Nebulous "Future" Pricing Information Obligation Created

Requires Suppliers Must Include "Prominent" Link To PSC's Consumer Rate Board On Website

New Variable Rate Disclosures Required

December 6, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The District of Columbia PSC adopted as final revised rules governing the Consumer Bill of Rights, which apply to retail electric and natural gas service to residential customers

The final rules provide that there are three (3) principal ways in which a Customer may enter into a Contract with an Energy Supplier:

(a) Through a recorded verbal consent via telephone Solicitation;

(b) Electronic Contract; or

(c) Written Contract.

For telephonic solicitations (including inbound calls in response to direct mailers), the supplier shall arrange to have the Customer’s intent to contract with the Energy Supplier, "independently verified." To verify a residential Customer’s intent to contract with an Energy Supplier by telephone, an Energy Supplier must utilize either:

1. An Independent Third-Party telephone verification;

2. An automated, computerized system; or

3. An electronic recording of the entire conversation between the Customer and the Energy Supplier which the Energy Supplier shall maintain for three (3) years.

Notably, the final rules include the previously proposed definition -- added late in the rulemaking process (as first reported in's exclusive analysis of the Sixth NOPR) -- for the term, "Third Party Verification (TPV)".

Specifically, the final rules define Third Party Verification (TPV) as follows: "the process of getting consent from a Customer to the below-listed material contract terms that is recorded by an independent person not party to the agreement or may be performed by an automated, computerized system. To be valid, the TPV must occur without the presence of the sales agent, and at the outset must describe how the Customer can cancel the TPV at any time prior to completion. The consent for the Customer must include an acknowledgement: (a) that he or she is voluntarily choosing to enroll with a supplier; (b) of the type of product offered such as variable, fixed, or a combination of both; (c) of the price and duration of the contract; (d) of the amount of an early termination fee if applicable; (e) that the Customer is authorized to make the switch; (f) of the contract renewal procedures;(g) [sic] that the Customer may access future pricing information; and (h) that the Customer has received the supplier’s Customer support contact information."

As first identified in's exclusive analysis of the Sixth NOPR, and now made final, the definition of TPV includes a requirement that the customer must acknowledge, "that the Customer may access future pricing information[.]"

Nowhere else in the final revisions to (or existing) Consumer Bill of Rights rules is there an obligation for the retail supplier to provide future pricing information under the current contract (e.g. excluding info required under renewal notices, such as a change in terms, etc.)

Also notable is the final rule adopts the proposal that, "To be valid, the TPV must occur without the presence of the sales agent[.]" The final rules do not further define the meaning of, "the presence of the sales agent," and whether the sales agent must physically leave the premises in order to comply with this provision.

Note also the final rules include imprecise language concerning "independent" TPVs. Specifically, while the term "Third Party Verification" is defined, the telephonic enrollment rules (and door-to-door rules if a written contract including required statements and notices is not used) provide for an, "Independent Third-Party telephone verification."

Additionally, while the telephonic rules first set forth that the customer’s intent to contract with the Energy Supplier shall be independently verified, the use of an, "automated, computerized system," for verification does not include the qualifier "independent", in contrast to the term, "An Independent Third-Party telephone verification."

The adopted final rules also include the term "Completed Written Contract" which is defined as follows: "An agreement between a Customer and an Energy Supplier that specifies the terms, conditions and charges for the provision of electric or natural gas services to the Customer and the agreement is signed or acknowledged through Third Party Verification, an electronic signature, or an electronic recording."

The term "Completed Written Contract" is only used twice -- once in reference to the start of the rescission period (noted below), and, also, in reference to the obligation to send the customer post-enrollment information.

Specifically, under the final rules regarding telephonic solicitations, "Once the Customer’s choice of Energy Supplier is verified by an Independent Third-Party Verifier or an electronic recording is made, the Energy Supplier shall, within five (5) business days from the day the Customer agreed telephonically to Contract with the Energy Supplier, provide to the Customer via U.S. Mail or electronic mail a copy of the Completed Written Contract."

In adopting the final rules, the PSC said, "Although RESA raised concerns that the inclusion of the term 'Completed Written Contract' could create confusion, after reviewing various comments regarding contracts and rescission periods, the Commission determined that adding the term to the definitions (Subsection 399.1) actually clarifies what constitutes an executed contract (Signed/TPV/Electronic Signature/Recorded) for purposes of the Chapter 3 rules. Therefore, the Commission will retain this term in the final rules."

The final rules set forth the trigger dates for the start of the three (3) business day Rescission Period as follows.

An Energy Supplier shall advise a Customer that he/she has the right to rescind the Contract agreement within the three (3) business day Rescission Period that begins on one of the following dates:

(a) When the Customer signs the Contract;

(b) When a positive Third-Party Verification or electronic recording has been made;

(c) When the Customer transmits the electronic acceptance of the Contract electronically; or

(d) When the Completed Written Contract is deposited in the U.S. Mail.

The final rules include a requirement that suppliers must "prominently display" on their websites' "homepages" (rather than a D.C.-specific page) a link to the PSC's rate board of retail supplier offers.

The adopted language states, "The Natural Gas Utility, Electric Utility, and Energy Suppliers shall prominently display on their websites’ homepages links to the Commission’s website pages for Customer Retail Choice and Consumer Suppliers’ Offers."

Furthermore, under the final rules, "An Energy Supplier shall post on its website current and understandable information about its rates, charges and services."

The final rules include requirements for variable rate disclosures as follows. In a variable rate solicitation, the supplier shall include, "An explanation of a variable rate should indicate that: (1) A variable rate may be based on market conditions; and (2) A variable rate may result in higher or lower costs over an initial introductory rate[.]"

The final rules include a broad definition of "Energy Supplier", encompassing entities who "arrange[]" for energy supply, which must be licensed by the PSC.

The final rules define "Energy Supplier" as follows:

Energy Supplier: An Electricity Supplier or Natural Gas Supplier as defined below:

Electricity Supplier: A person, including an Aggregator, Broker, or Marketer, who generates electricity; sells electricity; or purchases, brokers, arranges or markets electricity for sale to Customers. The term excludes the following:

(a) Building owners, lessees, or managers who manage the internal distribution system serving such building and who supply electricity solely to the occupants of the building for use by the occupants;

(b) Any Person who purchases electricity for its own use or for the use of its subsidiaries or affiliates;

(c) Any apartment building or office building manager who aggregates electric service requirements for his or her building or buildings, and who does not: (1) Take title to electricity; (2) Market electric services to the individually-metered tenants of his or her building; or (3) Engage in the resale of electric services to others;

(d) Property owners who supply small amounts of power, at cost, as an accommodation to lessors or licensees of the property;

(e) Consolidators;

(f) A Community Renewable Energy Facilities (CREFs) as defined in 15 DCMR § 4199.1 and as described in 15 DCMR §§ 4109.1- 4109.3 pursuant to the Community Renewable Energy Amendment

The final rules set forth various generally uncontested requirements governing various solicitation methods, including disclosures, requirements and processes for telephonic and door-to-door sales, including requirements that the agent must at the start of the solicitation first identify the nature of the solicitation.

See the final rules here

Aside from specific provisions related to 3-day accelerated switching and the confirmation of certain enrollments (which shall be effective September 10, 2019), the final rules will become effective upon their publication in the D.C. register

FC712-2018-M-1661, RM3-2014-01-67

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